What are the different types of MLM compensation?
MLM compensation is the way the person is paid for their involvement in a multi -level marketing operation. Multi -level marketing is also referred to as network marketing or pyramid marketing. The second term carries a more negative connotation. The general principle of MLM compensation is that each person receives a percentage of any sales that the people they hire into the system. The person then receives a smaller percentage of sales made by people received by their recruits, etc. This means that the person gets a certain level of royal rank from every sale of someone whose recruitment can be traced back together. In fact, this includes the entire pyramid of retailers under the original person. Generally in such plans, the rates of license fees begin relatively low and decrease with each step between the original person and the seller. So the license fees have gathered from people to the bottom of the pyramid can be small. The big difference is that each person in the chain is limited to two recruits. Each of these two recruits canthat bring two recruits themselves and so on. The idea is that the network grows faster because each person has less recruitment.
Australian or "Aussie 2UP" Plan includes recruits that pay training or paying for training materials. Each person gets part of the fees paid by every person they hire. Anyone who would become those who became recruits do not apply to any royal ranks. This means that the organizational chart for each person is basically flat.
The matrix plan works on the same basis as the Unilevel Plan, but has a defined limit. For example, three matrix would mean that the original recruit can receive the FROM license fees three people who hire themselves. Then they can earn a lower level of license fees from one person received by each of these three recruits, an even lower level from a person step further in each chain, and so on until it is six levels. So the network of the person will be full when reachingE three chains of six people, which means that in the graph it will be more rectangular than a more traditional pyramid.
The compressed compensation plan has the same structure as the Unilevel Plan. The network of each person will be in the shape of a pyramid. The difference is that the level of license fees is set to be much higher from the highest levels and much lower from the lower level than the standard uniform plan. This may be an advantage because in most cases it is likely that those approaching at the top of the chain actually make sale from which the license fees can be taken.